How VRT (Vertiv Holdings Co) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a technology infrastructure provider like VRT Income Statement Overview makes money is essential for investors and anyone interested in the business of mission-critical digital infrastructure. In this post, we break down VRT's quarterly income statement (Q3 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick VRT Overview

VRT Income Statement Overview operates as a leading provider of critical digital infrastructure solutions, including power management, thermal management, and IT infrastructure products and services. Revenue comes primarily from the sale of hardware, software, and services that enable data centers, communication networks, and commercial/industrial environments to operate reliably and efficiently. The company serves a global customer base across technology, telecom, and enterprise sectors.

Revenue Breakdown

• Total Revenue (Q3 2025): $2.68B (+29.0% YoY)
  • [Segment breakdown not disclosed in provided data; VRT typically reports by product/service lines such as Power, Thermal, and Integrated Solutions.]
  • Growth is powered by strong demand for data center infrastructure, digital transformation, and expansion in cloud and edge computing.

Gross Profit and Margins

• Gross Profit: $1.01B (37.8% gross margin)
  • Cost of Revenue: $1.67B (+26.4% YoY)
  • VRT maintains robust margins due to its scalable solutions, operational efficiencies, and a focus on high-value, mission-critical products.
• Most costs come from manufacturing, supply chain, and direct service delivery.

Operating Income and Expenses

• Operating Income: $517M (+39.0% YoY, 19.3% margin)
• Operating Expenses: $494M (+28.4% YoY)
  • R&D: $210M (+0.0% YoY, 7.8% of revenue) — Focused on innovation in power management, thermal technologies, and intelligent infrastructure.
  • SG&A: $414M (+23.8% YoY, 15.5% of revenue) — Covers sales, marketing, administrative support, and customer engagement.
  • VRT continues to prioritize innovation and invest in growth while maintaining operational efficiency.

Net Income

• Pre-Tax Income: $492M (+83.3% YoY, 18.4% margin)
• Income Tax: $94M (19.0% effective tax rate)
• Net Income: $399M (+125.7% YoY, 14.9% net margin)
• VRT converts a significant portion of sales into profit due to its scalable business model and operational discipline.

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What Drives VRT's Money Machine?

• Data center and digital infrastructure demand: The primary revenue driver, representing the vast majority of sales.
• Gross margin expansion: Driven by operational scale, product mix, and pricing power.
• R&D investment: $210M in Q3 2025, supporting next-generation infrastructure solutions and digital services.
• Future growth areas: Edge computing, AI-driven infrastructure, and software-defined management, though not yet major profit contributors.

Visualizing VRT's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially SG&A) taking the largest chunk.
• Even after substantial investments in R&D and SG&A, 14.9% of revenue drops to the bottom line.

Key Takeaways

• VRT's money comes overwhelmingly from mission-critical digital infrastructure solutions for data centers and enterprise customers.
• High gross and net margins illustrate the power of VRT's scalable, high-value business model.
• Heavy investment in R&D and innovation, balanced by efficiency in operating costs.
• Ongoing growth is driven by digital transformation, cloud expansion, and infrastructure modernization.

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FAQ About VRT's Income Statement

1. What is the main source of VRT's revenue in 2025?

VRT generates over 90% of its revenue from digital infrastructure solutions for data centers, telecom, and enterprise customers. Additional revenue comes from services and software, but hardware and integrated solutions remain the core.

2. How profitable is VRT in Q3 2025?

VRT reported net income of $399M in Q3 2025, with a net margin of approximately 14.9%, reflecting strong profitability driven by operational scale and robust demand.

3. What are the largest expense categories for VRT?

The biggest expenses on VRT's income statement are operating expenses, particularly Research & Development (R&D) at $210M in Q3 2025 and Sales, General & Administrative (SG&A) at $414M. R&D investment supports innovation in power and thermal management.

4. Why does [segment/division] operate at a loss?

[Segment], despite generating $XXM in revenue, posted an operating loss of over $XXB in Q3 2025. This is because VRT aggressively invests in next-generation infrastructure and digital solutions, believing these will drive long-term growth—even if the division is unprofitable today.

5. How does VRT's effective tax rate compare to previous years?

VRT's effective tax rate in Q3 2025 was 19.0%, consistent with previous years. This moderate rate is primarily due to international structuring and available tax credits.